Knowledge Base

Knowledge Base

What is IPV (In per verification) and KYC, and how does RKSV conduct an IPV? – Part 1

What is In Person Verification (IPV)?

It is mandatory for every investor to undergo the in-person verification (IPV) process before you actually open a trading account or invest in new mutual funds. It not only satisfies the criteria set by the Securities and Exchange Board of India (SEBI), but also helps brokers collect all essential details about their client. This is the reason why this process is so important.

Let’s know more about in-person verification.

What is the In-Person Verification process about?

Put into place in the year 2008 by SEBI, the IPV process makes it easier to verify the details of the person holding the account. In order to make the verification process completely authentic, it is important that the account holder submits all the required documents and proofs matching his/her true identity.

While the in-person verification system has been around for several years now, the latest technology has made it a simpler and a less time-consuming procedure. It is now often performed over the Internet using webcams. The latest IPV system eliminates the need to send staff members to meet the customer and match all the documents and identification proofs. However, sometimes even the traditional method can also be used.

What happens during the verification process?

As a client, you can use the live conversation medium of your choice during your in-person verification. From Skype and GTalk to Yahoo Messenger, SEBI has allowed use of virtually all trusted online chat platforms in order to make the verification process faster. So, all you need to get started is a good Internet connection and a properly installed web camera. And since you might also have to have a word online with the authorizing body’s representatives, get a fully functional headset too.

Once the broker has received all your required documents with proper information, he will schedule a live conversation with you. Before the IPV starts, make sure you have your address proof and PAN card ready to show. Also, ensure that your computer system’s resolution and video quality are set to high, making it easier for the other person to identify you. If the telephonic conversation round takes place, you will be asked some questions pertaining to your application. And once your identity has been verified, you can move ahead beyond the verification process.

Who Can Carry Out In-Person Verification?

Generally, any intermediary like a broker, who is active in the security market, can conduct in-person verifications. It is vital, however, that all the gathered information and documents are used in absolute accordance with SEBI’s ‘Know Your Customer’ or KYC guidelines.

To ensure that your documents are not misused, the SEBI has set up a centralized agency called the KYC Registration Agency (KRA). It maintains all your records in a centralized database. Whenever your KYC process is completed, your records with the KRA get updated. This is why it is important that the intermediary conducting your in-person verification be registered with SEBI. Otherwise, they will not have access to the KRA.

What rules has SEBI set for verification process?

The IPV terms set by SEBI for all intermediaries are:

It is obligatory for each intermediary to conduct IPV of its clients.

The intermediary is responsible for collecting and maintaining records of every important customer detail on the KYC form, including name, designation, company, and signature.

All other intermediaries have to count on the IPV performed by an intermediary who is approved by SEBI.

Once a KRA record has been updated, all other intermediaries can access the details. This eliminates the need to conduct multiple verifications and duplication of data.